WHAT IS YOUR TOP

BIR ISSUE IN RELATION

TO LETTER OF
AUTHORITY AND TAX
AMNESTY?
We will answer these at the end of the session . Use the
CHAT Box to input your questions.

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 TRAINING
WORKSHOP

Prepared by: PMAA Tax Consultancy and Bookkeeping Services Co.

Prepared for: PEZA TIGER COURSE (Taxation and Incentives Governance for Exporters
Review Course)

or

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 From Empowerment of
Electronic Letter of
Authority (eLA/LOA) to
Availment of Amnesty
A step-by-step technique to enable everyone to boldly
anticipate anything from the Bureau. Getting ready.

info.pmaa@gmail.com (+63) 0917-5485852 / (+632) 89259849

 Workshop Agenda
Time/Length: 1.5 hours
1. What is a BIR Letter of Authority (eLA)?
2. What are the issues inside the letter?
3. What is the BIR eLA sequence?
4. How to avoid getting a Subpoena?
5. Why do we have bloated deficiency assessments?
6. How to counter the findings using laws and jurisprudence?
7. What are the remedies in TY2017 and prior years, in TY2018, in
TY2019?
8. What is Republic Act No. 11213 Tax Amnesty?
9. What is Voluntary Assessment and Payment Program?

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 Workshop Agenda
1.What is a BIR
Letter of
• Definition
• Legal Basis
• On the Taxpayer side

Authority (eLA)? • On the Official side

2.What are the 1.BIR Form 6.Date Printed

2.Jurisdiction 7.Taxpayer
11.Documents
12.Taxes
16.Approval
17.Signatory
issues inside the 3.Paper 8.Bearer
4.Serial No. 9.Examine
13.Period
14.Basis
18.Important
19.Received
letter? 5.Title 10.BOA 15.Results 20.Date Rcd

3. What is the • eLA +CL •FAN/FLD

eLA sequence • 1st RPR
• 2nd RPR
•FDDA
•WDL
and • NOD
• PAN
•WG

consequence?

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 Workshop Agenda
4. How to avoid
getting a
• Three (3) Salient Features
• Four (4) Ways Survival Guide
• Two (2) Letters
Subpoena Duces • Two (2) Venues For Non-Compliance □DOJ □MTC
Tecum (SDT)?

5. Why do we • Undeclared Purchases •Access Letters

have bloated • Unsubstantiated Expenses
Withholding of Taxes
•Surcharge, Interest and
Penalty
deficiency • Improperly Accumulated Earnings
assessments?

6. How to
counter the • RA 9485
• RA 11032
•RMO 44-2010
•RMO 19-2015
findings using • RAMO 1-2000 •CTA and SCRA Rulings
laws and • RR V-1 RR 6-2006 RR 11-2005

jurisprudence?

info.pmaa@gmail.com (+63) 0917-5485852 / (+632) 89259849

 7. What are the
Workshop Agenda
•RA 11213
remedies in
TY2017 and prior
years, in TY 2018, •VAPP
in TY 2019?

8. What is
Republic Act No. •Definition
11213 Tax
Amnesty? •Benefits

9. What is
Voluntary •Definition
Assessment and
Payment Program? •Benefits

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 THE RULE OF TAXATION SHALL BE
UNIFORM AND EQUITABLE. The
Congress shall evolve a
progressive system of taxation –
Sec. 28, Article VI, 1987 Philippine
Constitution

1.What is a BIR Letter of

Authority (eLA)?
eLA is an official document that
empowers a Revenue Officer to
examine and scrutinize a
Taxpayer’s books of accounts and
other accounting records, in order
to determine the Taxpayer’s
correct internal revenue tax
liabilities.
info.pmaa@gmail.com (+63) 0917-5485852 / (+632) 89259849
 sample:REGULAR ELA

Taxpayer REGISTERED Name, Address, TIN

2.What are
the issues
inside the
letter?

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 sample:VAT ELA

Taxpayer REGISTERED Name, Address, TIN

This is a replacement eLA

info.pmaa@gmail.com (+63) 0917-5485852 / (+632) 89259849

 sample:RATE ELA

Taxpayer REGISTERED Name, Address, TIN

info.pmaa@gmail.com (+63) 0917-5485852 / (+632) 89259849

ELA w/ CHECKLIST OF
REQUIREMENTS

3.1. What is the

eLA sequence?
 FIRST
NOTICE

10 DAYS
SECOND
AND
FINAL
NOTICE
10 DAYS
 NOTICE OF
DISCREPANCY
(RR 22-2020)

30 DAYS
 PRELIMINARY
ASSESSMENT NOTICE

15 DAYS
 DETAILS OF DISCREPANCIES
(PAN)
PAN
 FINAL ASSESSMENT
NOTICE / FINAL
LETTER OF DEMAND
15 DAYS
 DETAILS OF DISCREPANCIES
(FAN/FLD)

FAN/FLD
 AUDIT
RESULTS/ASSESSMENT
NOTICE (FAN/FLD)
FAN/FLD
 FINAL DECISION
ON DISPUTED
ASSESSMENT
FDDA
 30 DAYS

180 DAYS
 WARRANT OF
DISTRAINT
AND/OR LEVY

WDL
 TP MOTION FOR
RECONSIDERATION

MR / AD
 2107 / 2110

SECTION 204

204
 WARRANT OF
GARNISHMENT
WG
SUBPOENA
DUCES TECUM
S
B
3.2. What is the eLA R
I
U
B

consequence? N
G
M
I
T
 •Three (3) Salient Features
1.appear
2.bring
3.submit

•Four (4) Ways Survival Guide

4. How to 1. REACT.

avoid getting 2. HANDLE.

3. BE THOROUGH.
a Subpoena 4. SURVIVE.
Duces Tecum
•Two (2) Letters
(SDT)? 1.appearance notice
2.transmittal notice

•Two (2) Venues For Non-

Compliance
■ DOJ
■ MTC
SDT
 DOJ
SUBPOENA
FOR VIOLATION OF
TAX CODE S266

DOJ
 TAXPAYER

MTC
CRIMINAL CASE
FOR VIOLATION
OF TAX CODE
S266

MTC
 1.Non-filing of Withholding of Taxes,
Income Tax Returns, VAT Returns
2.Undeclared Purchases
3.Unsubstantiated Expenses
4.Misclassification of accounts and
deductions
5. Why do we 5.Sales or income of domestic branches
purportedly shown as income of the
have bloated foreign head office
deficiency 6.False claim of items of income and
expenses or assets or liabilites in the
assessments? accounting records or return
7.Comparison of BIR access letters
given to your customers versus
company records
8.Improperly claimed deductions
 9.Padding of purchases and expenses
10.Claim of depreciation of non-
existing assets; assets owned by other
person
11.Claim of purchases from non-VAT
5. Why do we sources as VAT purchases and claiming
have bloated tax credits
12.Non-issuance of sales invoices or
deficiency under- or non-recording of true and
assessments? correct sales or income
13.Non-payment of VAT on materials
imported for re-export (smuggling)
14.Surcharge, Interest, Penalty
 1.SEND COPIES OF YOUR LETTERS TO
THE FOLLOWING:
*COMMISSIONER OF INTERNAL
REVENUE,
*PRESIDENT RODRIGO R.
DUTERTE/ASec. Jaime L. Mabini
6. How to Presidential Complaint Center,
counter the Bahay Ugnayan, Jose P. Laurel
St., Malacanang, Manila,
findings using *Atty. Jeremiah Belgica, Anti-Red Tape
Authority, G/F HPGV Building, 395
laws and Sen.Gil Puyat Avenue, 1200 Makati,
jurisprudence? Philippines,
*PUBLIC ASSISTANCE AND CORRUPTION
PREVENTION OFFICE, OMBUDSMAN,
Agham Road, Diliman, Quezon City,
*The Commissioner, Civil Service
Commission, Batasan Hills, Quezon
City
 2. REPUBLIC ACT 9485 ANTI-RED TAPE
AUTHORITY
6. How to 3. REPUBLIC ACT 11032 EASE OF DOING
BUSINESS, CITIZENS CHARTER
counter the 4. REVENUE MEMORANDUM 1-2000
findings using 5. RMO 58-2010 CONDUCT OF BIR
OFFICIALS
laws and 6. SECTION 203, 204, 228, 235, 246,
jurisprudence? 269, 270, ETC OF THE NIRC
7. CTA AND SCRA RULINGS
PART 2:
TAX
AMNESTY
 TY 2017 AND PRIOR YEARS:
REPUBLIC ACT 11213.
1.TAX AMNESTY ON
7. What are DELINQUENCIES

the remedies 2.ESTATE TAX AMNESTY

in TY2017 and
prior years, in TY 2018:
TY 2018, in TY VOLUNTARY ASSESSMENT
2019? AND PAYMENT PROGRAM OR
VAPP.

TY2019:
PREPARE.
AMNESTY
AMNESTY
REPUBLIC ACT 11213:
TAX AMNESTY ON DELINQUENCIES

AMNESTY
COVERAGE:
TAX
AMNESTY
RATES
PROFORMA: Certificate of Tax Delinquencies
 notice of issuance of authority to
cancel assessment

TP name, address, TIN

SAMPLE: NIATCA
WE

WC
 criminal case civil
administrative case all suits and action

penalties

other investigations

lifting of notice of levy/garnishment

IMMUNITIES
AND
PRIVILEGES
REPUBLIC ACT 11213:
ESTATE TAX AMNESTY
 ESTATE OF DECEDENTS WHO DIED
ON OR BEFORE DECEMBER 31, 2017

COVERAGE ESTATE AMNESTY TAX AT THE RATE

AND TAX OF SIX PERCENT (6%) BASED ON
AMNESTY THE DECEDENT’S TOTAL NET
ESTATE AT THE TIME OF DEATH.
RATE
MINIMUM (P5000)
SAMPLE:
ESTATE TAX
AMNESTY
COMPUTATION
with PREVIOUSLY
FILED ESTATE TAX
 IMMUNE FROM PAYMENT OF ALL
ESTATE TAXES, INCREMENTS AND
IMMUNITIES ADDITIONS THERETO
AND
PRIVILEGES
IMMUNE FROM ALL APPURTENANT
CIVIL, CRIMINAL AND
ADMINISTRATIVE CASES
RR 21-2020:
VOLUNTARY ASSESSMENT AND PAYMENT PROGRAM
RR 21-2020:
VOLUNTARY ASSESSMENT AND PAYMENT PROGRAM
VAPP RR 21-2020: NOT QUALIFIED TAXPAYERS
VAPP RR 21-2020
VAPP RR 21-2020: HOW TO AVAIL

Mandatory Requirement
1. FILE - BIR Form No. 2119 (Annex A of RR 21-2020)
- VAPP Application Form
a. Tax Type – Always MC
b. Alphanumeric Tax Code- RMO 34-2020
-MC341 -9a
-MC342 -9b
-MC343- 9c
2. PAY – BIR form No. 0622 (Annex B of RR 21-2020)
a. mode of payment –CASH only (manager’s check is acceptable)
-TRA is not considered cash in availment of VAPP
VAPP RR 21-2020: HOW TO AVAIL
Mandatory Requirement
b. Where to Pay?
1. NON ONETT –Sec 9a & 9B – AAB’s or RCo’s of the RDO
where TP is registered
2. ONNETT –Sec9c – AAB’s or RCO of the RDO who has
jurisdiction of the ff:
-sale of real property (where the property is located
-sale of shares of stock (where the seller is registered)
-Donation (Domicile/residence of the donor)
-Inheritance (Domicile/residence of the decedent)
c. Where to file? – same where you pay
VAPP RR 21-2020: HOW TO AVAIL
Other Requirements
1. Filed Tax Returns and proof of Payment in 2017 and
2018 and FS
2. Remittance Returns and Proofs of Payment of FWT
and CWT other than ONETT
3. Deficiency Tax Payments (2018) BIR form 0605 ) –
4. ONETT Tax Returns ( 1800,1801,1706,1606, and
2000OT)

Reminder – 4 copies original

VAPP RR 21-2020: HOW TO COMPUTE
● For Income Tax, VAT. %, Excise Tax & DST other than ONNET (Sec9.a)
Step1 : Compute the total taxes due in 2017 & 2018
- Sum of taxes due of all registered tax types per return (IT,PT, ET, DST)
Step 2: Determine the % of increase/decrease in the total taxes due
from 2017 to 2018

Total taxes Due 2018 xxx

Less: Total Taxes Due 2017 xxx
Diference xxxx
Divided by total tax due 2017 xxxx
Increase/Decrease xxxx
VAPP RR 21-2020: HOW TO COMPUTE
Step 3: Determine the applicable rate whichever is higher of the 2
but not lower than the minimum
*Basis of Gross Sales & Taxable Income
-ITR for taxable year 2018 or Fiscal year ending june 2019

Step 4: Compare with the Minimum Payments- whichever is

higher
-Minimum payments
a. Individual – 75,000
b Corporation – subscribed capital stock
1. 50M and more –P1M
2. 20M and up 50M –P500k
3. 5M up to 20M –P250k
4. 5M and less -P100k
Increase/Decrease in the Amount of Voluntary Tax
Total Taxes Due from Payment
2017 to 2018 (A) Whichever is the higher of – (B)
Net increase of not 3% of 2018 gross sales
more than 10% or
7% of 2018 taxable net
income
Net increase of more 2% of 2018 gross sales
than 10% up to 30% or
6% of 2018 taxable net
income
Minimum Amount (C)
Individuals, estates and
trusts – P75,000
Corporations –
a. With subscribed
capital of more than
P50 million –
P1,000,000
b. With subscribed
capital of more than
P20 million

VAPP 21-2020:
Net increase of more 1% of 2018 gross sales
than 30% or RATES (IF
5% of 2018 taxable net
income
NET
INCREASE)
Increase/De Amount of Minimum Amount (C)
crease in Voluntary Tax
the Total Payment VAPP 21-2020: RATES
Taxes Due Whichever is (IF NET DECREASE)
from 2017 the higher of –
to 2018 (A) (B)
Net 4% of 2018 up to P 50 million
decrease gross sales – P500,000
of not or c. With subscribed capital of more
more than 8% of 2018 than P5 million up to P20 million –
10% taxable net P250,000
income
d. With subscribed capital of P5 million and less –
Net 5% of 2018 P100,000
decrease of gross sales
more than or Other juridical
10% 9% of 2018 entities, including but not limited to
taxable net cooperatives,
income foundations, general professional
partnerships –
P75,000
VAPP RR 21-2020: SAMPLE ILLUSTRATION
VAPP RR 21-2020: SAMPLE ILLUSTRATION
Step 1. Compare the percentage increase
Total TAXES Due 2018 875, 000
Less: Total TAXES Due 2017 - 800, 000
Difference 75, 000
Divided by total tax due 2017 800,000
Increase/Decrease (NOT More than 10%) 9.375%
- look for table of applicable tax rates
Step 2.Compare applicable rates
a. 3% of 22,000,000 (2018 Gross Sales) = 660,000
b. 7% of P1,350,000 (2018 taxable Net Income ) = 94,500
c. Higher amount (Voluntary Payment) = 660,000
VAPP RR 21-2020: SAMPLE ILLUSTRATION
Step 3. Compare with the minimum payments

CORP SUBS. CS for 5M up to 20M –P250,000

Step 4. Compare Step 2 and Step 3

STEP 2 = P660,000.00
STEP 3 = P250,000.00

Step 5. The amount to be paid to avail of the VAPP for the taxes
above is P660,000.
2019 AND BEYOND: MOVING FORWARD
REMEMBER THE FOLLOWING WHEN FINALIZING YOUR
ANNUAL FS:

RR 11-2005 Defines “Gross Income Earned” to implement the tax

incentive provision of Republic Act No. 7916, otherwise known as
“The Special Economic Zone Act of 1995”

RR V-1 BOOKKEEPING REGULATIONS

CHART OF ACCOUNTS ON THE ITR
CTA RULINGS